Only fools never change their minds. Take the White House's attitude, for example. On Friday, Israel struck Iran. The US pretended to look the other way, knowing full well what was going to happen. Until Monday, Trump maintained his usual ambivalence: a vague stance and a tight jaw. Then on Tuesday, a sudden shift. A call for Tehran's unconditional surrender. And a threat to bring the US military into the fray.

These statements were ultimately viewed negatively by the financial markets, which saw them as a continuation of the escalation. Oil, in particular, rose again after losing some of the gains it had made since Friday. It should also be noted that the president's somewhat interventionist stance has greatly displeased some MAGA theorists, who see it as a serious breach of dogma. But that's another story that I won't go into here.

US stocks, for their part, fell sharply during the session. The decline was accentuated by weaker-than-expected US consumer spending in May. Economists believe that consumers brought forward their purchases in April due to tariffs, causing a slump in May. The question now, worth hundreds of billions of dollars, is whether the virus of caution will spread in the coming months. The S&P 500 closed down 0.84%. Earlier in the day, the Stoxx Europe 600 fell by almost the same amount in Europe. The broad US index is still up 1.7% in 2025, while its European counterpart is up 6.8%. Not too bad considering the turmoil since the beginning of the year.

The other big headline of the day is not geopolitical, but monetary. Even though the US central bank had to factor in the new tectonic shifts in the Middle East at its meeting that began yesterday and is set to conclude tonight with a status quo on interest rates. Fed decisions are always an important milestone for investors, even when the outcome seems a foregone conclusion. In this case, US interest rates will remain unchanged and Fed Chairman Jerome Powell is expected to confirm that it is urgent to do nothing.

At the same time, the Fed will publish its updated forecasts, which are likely to look something like this: moderate growth, slight deterioration in the labor market, and upside risks to inflation. The decision is scheduled for 7:00 p.m., and Powell's comments will begin at 7:30 p.m. The market currently expects the status quo to remain unchanged at the next meeting, scheduled for late July, and forecasts a 63.2% chance of a rate cut in September, according to the CME's FedWatch tool. This is precisely what we will need to watch for in order to understand Wall Street's reaction to Powell's remarks. Observers will also have access to the dot plot, a forward-looking chart that measures the Fed's appetite for moving rates in the short, medium, and long term. The current battle is between one and two rate cuts this year. It may be a detail for you, but for the world of finance, it means a lot.

In Asia-Pacific, geopolitical tensions are not really affecting Japan, where the Nikkei rose 0.7% at the end of trading. Hong Kong has been struggling more in recent days, with a decline of more than 1% this morning. South Korea and Taiwan are up slightly. India and Australia are down by about 0.1%, though Sydney is still hovering around last week's record high. Leading indicators in the West are uncertain and reflect the renewed nervousness visible in the VIX, the index that measures volatility and therefore investor fears.

Today's economic highlights:

On today's agenda: employment figures in France; retail sales in Germany; in the United States, the Conference Board's consumer confidence index. See the full calendar here.

  • GBP / USD: US$1.35
  • Gold: US$3,386.32
  • Crude Oil (BRENT): US$76.46
  • United States 10 years: 4.41%
  • BITCOIN: US$105,474

In corporate news:

  • Rolls-Royce receives an order for 116 engines from Riyadh Air.
  • Sunda Energy secures a 12-month extension for its production sharing contract.
  • Airbus production of A400M Atlas aircraft secured until 2028 by France and Spain.
  • Gerresheimer stock fluctuates amid discussions with Warburg Pincus and a failed takeover attempt.
  • Pirelli updates governance agreement between Camfin and MPI Italy, reflecting differing views on Sinochem Group's control.
  • OVS accelerates acquisition process by obtaining a 100% stake in Goldenpoint.
  • Geox completes EUR 29.9 million share capital increase.
  • General Motors partners with NP Aerospace to explore UK and NATO market opportunities.
  • Amazon plans workforce reduction due to generative AI rollout amidst falling US tech stocks.
  • Meta enhances AI capabilities with $100 million bonuses to recruit OpenAI talent and expands product line with Luxottica.
  • Hasbro Inc. cuts 3% of its workforce as part of a cost-cutting effort.

See more news from UK listed companies here

Analyst Recommendations:

  • Standard Chartered Plc: Autonomous Research maintains its outperform recommendation and raises the target price from 14.21 to GBP 14.29.
  • Howden Joinery Group Plc: Citigroup remains neutral recommendation with a price target raised from 8.20 to GBP 8.55.
  • Compass Group Plc: BNP Paribas Exane maintains its underperform recommendation and reduces the target price from GBX 2500 to GBX 2400.
  • Bellway P.l.c.: Barclays maintains its overweight recommendation and raises the target price from 30.31 to GBP 33.80.
  • Wise Plc: Jefferies maintains its buy recommendation and reduces the target price from 12.47 to GBP 12.31.
  • Fevertree Drinks Plc: Citigroup remains neutral recommendation with a price target raised from 7.15 to GBP 9.